South Korean bad loans climb as new delinquencies outpace resolutions

There were more unsecured loans and less resolved loans in April.

South Korean banks’ won-denominated loans saw delinquency rates increase slightly in April 2026 compared to a month and year earlier as the volume of newly delinquent loans grew.

Newly delinquent loans rose by $130.3m (KRW0.2t) on month, whilst that of resolved loans declined by $1.76b (KRW2.7t), according to data from the Financial Supervisory Service (FSS) of Korea. Delinquency rates of business loans and household loans inched up during the period.

For business loans, the rate climbed to 0.74% in end-April from 0.68% in March. Delinquency rate on loans to large companies was unchanged at 0.22%, whilst SME loans’ rate climbed to 0.9% from 0.81% previously.

The delinquency rate of household loans rose to 0.42% in April, from 0.4% in March.

The rate of unsecured loans jumped to 0.83% in April, from 0.76% in March.

For May, South Korean banks extended more loans than in April, and there is continued strong corporate and mortgage demand, according to the Bank of Korea.

There is also an increased demand for intermediate payments financing for pre-sold housing units, the central bank said in an earlier report.

(US$1 = KRW 1,534.81)